I wonder whether Snippa Spud will comment here?

Given the wide nature of his expertise the Infinite Monkey should be able to manage something.

Co-operative Bank will cut its historic ties with the Co-operative Group and impose heavy losses on retail bondholders as part of a £700m rescue deal with its US hedge fund owners to avert a collapse.

Perhaps the insistence that it was just fine for people with no knowledge of banking to run a bank could be rethought?

This latest plan, which will be voted on by all the lender’s investors, will see £250m of new equity injected into the bank and at least £443m raised from a debt-for-equity swap, helping to shore up its capital position.

It will deal a blow to retail investors, who will receive cash from the deal. Those holding less than £100,000 in bonds will only get back 45p in the pound of their initial investment, with the total payout capped at £13.5m.

However, institutional investors will suffer even heavier losses and will receive roughly 15p in the pound in shares, although they will increase their equity stakes in the bank.

Possibly there could be a reconsideration of bond investments in nice local and cuddly projects as a manner of financing pensions?

What opportunities to explain the new economics there are here!

For example, if banks simply create money then how did this one run out of it?

8 comments on “I wonder whether Snippa Spud will comment here?

  1. I’ve often wondered if Spud is the Cappuccino economist.

    He is personally like the cup. Fat and round, trying to give the appearance of substance but in reality brittle and likely to break into pieces under pressure. The espresso at the bottom is his intellect and personality, dense and bitter and hidden from view by the frothy milk of his ideas, which turn out to consist of less than you might first imagine as they are whipped into a froth using a lot of hot air. On the top is some chocolate or nutmeg which is the thing he wants us to see, some vague notion of fairness and equality but, left for a while, this quickly sinks below the surface and it all becomes an indigestible sludge at the bottom of the cup which must leave anyone who has paid for it wondering where the hell has all their money gone and why didn’t they have a cup of tea instead.

  2. Surely it is perfectly acceptable to have none bankers run a bank – as long as you don’t mind the inevitable outcome… So know one group who try it may even do well – but like Eddie the eagle, let them try but don’t complain when they don’t win…

  3. I have links with a local charity whose trustees have long boasted to me of our ethical investments. I’m going to be ripping new arseholes for some people this weekend.

  4. Tim

    A fine article to which obviously you will get no response beyond the usual post hoc bs about ‘Moar taxes’ and the ‘Curajus state’ being the answer regardless of the question.

    I did enjoy this sentence, which is a standing rebuke to the resident troll on these pages, DBC Reed.

    ‘For example, if banks simply create money then how did this one run out of it? ‘

    I doubt beyond a reference to that famous Bank of England paper we will get an answer but the question was one that needed asking…

  5. But, but candidly, this sort of inequality is totally obscene.

    Oh, wait, it’s the right way round, so that’s ok then.

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